Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/204812 
Year of Publication: 
2019
Series/Report no.: 
MAGKS Joint Discussion Paper Series in Economics No. 17-2019
Publisher: 
Philipps-University Marburg, School of Business and Economics, Marburg
Abstract: 
We use a 2018 survey of FX margin traders in Japan to investigate which key factors influence their performance: socio-demographic and economic situation, investment strategy and trading behaviour, and/or financial literacy. First, the data show that variables from all three groups are significant predictors of traders' performance. Second, we find that older traders and those without a specific trading strategy demonstrate lower performance. Performance is higher for those who trade greater amounts, rely more on fundamental analysis, and report having profitable FX trade skills. Third, respondents' subjectively stated claim of having FX trade skills is based on a more advanced understanding of FX trading and a reliance on professional advice. Neither objective financial knowledge nor over/underconfidence play a noteworthy role in the performance of margin traders.
Subjects: 
Foreign exchange margin trading
investor survey
foreign exchange trading profits
financial literacy
Japan
JEL: 
F31
G11
G28
G40
Document Type: 
Working Paper

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